Final answer:
Some U.S. companies report under IFRS if their parent company uses IFRS or if they do significant business in countries using IFRS for easier consolidation and understanding among international stakeholders. Other possible reasons include debt covenant requirements and having the resources to make the switch, though these are less certain without additional context.
Step-by-step explanation:
The question pertains to why certain U.S. companies may choose to report their financial statements according to the International Financial Reporting Standards (IFRS) as opposed to the Generally Accepted Accounting Principles (GAAP) which have been traditionally used in the United States. There are several reasons why a U.S. company might report under IFRS, and the reasons mentioned in the question suggest different contexts in which IFRS might be adopted.
One reason (C) is that the company may be a subsidiary of a foreign parent company that uses IFRS. In this case, uniformity in financial reporting across the entire corporate group simplifies consolidation and may provide a clearer financial picture to stakeholders. Another situation (D) where U.S. companies would adopt IFRS is if they conduct significant amounts of business or have operations in countries where IFRS is the required reporting standard. For these companies, reporting under IFRS facilitates comparisons and understanding among international investors and can streamline reporting obligations in different jurisdictions.
While option (A) could be a reason related to specific contractual agreements such as debt covenants that may stipulate the use of IFRS, and (B) indicates the availability of resources to adopt the standards, the question doesn't provide enough context to affirm these choices definitively. Nonetheless, both reasons are plausible considerations businesses might weigh when deciding their accounting reporting standards.
Overall, the adoption of IFRS amongst U.S. companies is often influenced by their global operating environment and corporate structure. Understanding these reasons can shed light on the global convergence of accounting standards, a phenomenon that has accelerated due to increasing international business transactions and the desire for standardization in financial reporting.